tv Fast Money CNBC November 20, 2013 5:00pm-6:01pm EST
plus. cnbc fast money begins right now. >> nasdaq markets, new york city time square. stocks selling off late in the day after the fed shows signs of taper is coming. we've got a head manager who says it's dangerous you to the be short now. fast money traders never back from danger. that's coming up. pant as for $1.97 today. we'll tell you who that is. stephen, brian, mike. let's get to our top story, the latest from the federal reserve meeting hours ago. stf fed is getting ready to slow down the bond buying program. is that shocking? honestly. >> okay. run for the door. it's craziness. absolute craziness.
i think they should have tapered in september, blew it then. i would do it in december. they had the big reaction. everyone is nervous. we do work with behavioral finance. looking at google trend, look at how much you see stock markets bubble how much people look had the up. you can see big spikes. people are starting to look at stock market bubbles on google in 2007. people are nervous. that's all that's going on. i wouldn't worry about it. >> when you go back to may -- when you say you wouldn't worry, classify it. go back to may, there are selloffs. those should be 4 to 6%. if that happens, can you time it appropriately to get back in at the right time? if you're a longer term guy, sty long. the selloff is coming. i said it yesterday. >> and the day before 12k3w4r67. >> and a couple before that. >> the strategist put out saying
we are bob marley. don't worry about a thing. there are too many people talking about the same things. that could time the market. >> i don't know who put that out. that could come back to haunt him putting that out. we said over the summer i didn't think there was a chance of tapering this year. proved to be correct. they had every opportunity to do it in september, set up perfectly. >> the government shutdown was coming. >> horse hockey. horse hockey. that was an excuse. board makes comments today. they're data dependant. only thing that matters is unemployment rate, ticked up to 7.8%. i don't have see anything coming soon before spring or summer. with that said, i thought 17.60 we trade down to this week. i think we'll get there. technically it's critical we close above that this week. >> karen. >> i'm a no woman no cry spot.
i have no favor in that. one thing on the horizon is not so much tapering, it's december 13th. do we see any kind of positive movement in government? it's hard to be optimistic act that. maybe the fourth time that we give it a go, maybe that won't matter if we don't make progress. i don't think think we're going to make progress. >> i team we've been down that road before. government has the opportunity to do something. >> we do know we're not going to see a government shutdown. republicans have learned a lesson there. we're not going to see. that if you see anything but a government shutdown, it's seen as a positive to the marketplace. come around december 13th, you're not going to see long term deals. i don't think any of us will see long term deals. you could see maybe them talking about corporate tax reforms or something. that would be positive for the market going on. >> it doesn't matter. october numbers for the economy when the shutdown came, they were good. retail sales came out today.
they were good. really didn't seem to have that much of an impact. had an impacts on sentiment. sentiment changes quickly. >> do you believe the rally we've seen is built primarily on qe? >> in my opinion large part yes. in the absence, doesn't that mean markets are poised for a fall? >> we need earnings growth to improve. i don't think we've had it at all. i've made that argument quite some time. i thought the market -- pillars should be earnings, growth, revenue, growth. four pillar corner stones. maybe we have one of four. you need at least two if not three. all have been misfed. the market is here's. as i pointed out, you have market, new york exchange market at record levels. the 200 day moving average where the s&p 500 is, as wide as it's been in some time. warning signs are there.
i think you have to watch this week. next week is a short week, holiday week. 1760. >> is if it isn't there, i'm talking 17.30 pulling back to. karen's point she can't thread the needle, nobody can. you have to treat this like tesla at this point. it's slower, incrementally higher each day and moves higher. 17.30, look and reassess. >> that's why the volatility index is so low. it's a slow creep higher. it's not moving much you to make the spike. >> you've seen a couple of spikes here and there. the federal reserve has withdrawn volatility from the market. you'll see them reduce over the next six months. i expect that. probably why the hedge fund made a bet on the index. it's a chaep bet. if you worry about this, just buy on the s&p 500. >> markets still near all time
highs. is it a switch to the short side? some sellers call it the opportunity of a lifetime. not everyone. sk bridge capital says it's dangerous to be here. >> it's dangerous talking about the tapering thing. i want to be on record i don't think the feds will taper as quick as people think. there's no reason for them to tape her right now. if you look at where the u 6 unemployment number is, minus 13.6%. not going to taper any time soon. that's my opinion. number two, eight out of ten years the market goes up. you're going to be losing money on the short side eight out of ten years. number three, if we were market timers in this room which none of us really are, we could get short term direction once in a while. if we could all market time, we'd be the richest people on earth. there are a few people amazing
at it. jim is amazing at it. in general for our viewers and average retail investor, being on the short side in a market like this, even if they start tapering, we know it's a taper from $83 billion to $73 billion of purchases. $65 billion of purchases. this would be a disaster to get short of market like this. >> the average short based hedge fund was down 17% through the month of october. there's going to come a time you have to make the swim. what are you looking for? >> what you look for is a change in the federal reserve monetary policy which we don't see happening through 2016. look for a slow down in the fundamentals as it relates to what's going on in the stock market. we have the largest pile of cash. karen and i are value investors. look at the cash pile on s&p 500. is it 2 trillion?
it's somewhere in that neighborhood. largest percentage since the 1950s. if we saw a change in that we could get worried. you would want to use shorting as a you hedging strategy not locked in strategy. the reason they're down in a plus 25 market, that's their strategy. that's the wrong strategy for the average person. >> so anthony, you were talk about there are some people saying this could be the short of a lifetime here. i'm not seeing it in the s&p 500 positioning, in hedge fund -- >> what about leverage ratios? in 2008 compared to today, we don't have the near term bubble. could the stock market go up 25%? yes, obviously we all know that. i don't think it's a dedicated strategy going to win the day. eight out of ten times over the last 75 years is s&p 500 has
gone up. >> thanks for stopping by. good to see you. speaking of shorts, jackie back at headquarters watching green mountain coffee. >> hey melissa. a lot of buzz after hours. the company reported profits jumped driven by higher sales of single serving coffee packs. the billion buy back and dividend of 25 cent ace share, looks like a good quarter. couple of things holding the i sales back. the conference call is underway now. back to you. >> thank you very much. this has been a target for short sellers including david of green light capital. you're in it as well. >> we're in it. it scares me the dynamics being short like this. for the bear, the gross margin didn't look great. they were able to manipulate the
working capital not saying there's anything wrong with that. it's a mechanism to use. we'll see what they say on the call, particularly how they respond to questions from investors. i'm not sure if david will be on the call. >> halftime report will have the exclusive interview with green light capital founder. that's tomorrow 12:p.m. eastern time on cnbc. pants for $1.97. that sent one company struggling into the retail tails. i know you want those pairs. now we are bringing in someone who uses the bik coin economy taking off the head of the largest exchange tells us why he thinks this is a legitimate asset. that's coming up next. stay tuned.
sharply. positive same store sales in october. mark ullman says penny is encouraged by sales in november. he says the consumer is coming back. e commerce appears to be taking off on those comps. we had a disaster report from khols. maybe there's share taking. >> maybe. i thought khols was overblown and misvalued. i thought jcpenney was okay. wasn't great either. they did talk about gross margin also being dragged down for the next quarter or maybe two. they had a couple of things that were okay. i think there's so much better value elsewhere. if you look at macy's up today, jcpenney is trying to get to where macy's is. it's valued pay way higher multiple discounting back not enough discount rate. macy's is much better on every
level. >> ridiculous move. to karen's point, there's still probably room to the upside. we're still in a deep down trend. the next interesting trend is going to set up on the short side. the same way blackberry shut down. the business is still a mess on karen's point. as we get approaching this 15 1/2 dollar level, you have to start thinking about this. >> to broaden out, if you look at retailers in general, we talked about how retailer, lower end family dollar have benefitted from lower gas prices. today gas price up over 1%. you're starting to see the refinery. if you're in wal-mart, start to watch the gasoline. >> take a look at s&p 500 retail index. if it closed today at these levels this would be the best your going back to 1990, sixth
best year since 1990. the performance of the retail index has been staggering. >> right. especially off the october low retailers ripped higher. if you want a rip higher, abercrombie, trade roughly $35, that could be interesting going into the holiday and first quarter next year. >> are you still a model for them? >> the clothes got a little tight fitting. >> that's interesting. >> are we still on air? >> we talked about how the holiday this year would be promotional. take a look at this video from the smith haven mall in long island. the sign adjusting everything on this rook could be sold for $1.97. >> that's a bargain.
i'll buy the rack. >> it's called being frugal. frugality is important. wear it, get a hole, throw it away. >> the fact they use real estate in their store to have a 1.97 merchandise as opposed to selling higher priced merchandise, doesn't that speck volumes? >> maybe. >> can only hope. >> anybody here like el brands? what part of it? >> there we go. >> that part is okay. >> that part is big now. >> that was just.
quality and safety about the vehicles. the fact they're willing to step forward to the plate and be collaborative is positive. >> here's what strickland had to say about how long the investigation might take. >> no thyme frame. we want to get this right. sometimes investigations take handful of weeks, sometimes months. with tesla being proactive and helping us, hopefully shorter range. >> the time is potentially a problem for tesla. if the federal investigation lasts more than a few months that could really save off demand. >> i disagree. i think sunlight is the best disinfectant. using this stock, i think you can buy tesla. toyota had a sticky accelerator
in 2010. they saw a drop off in vehicles because the safety investigation dragged on. >> the headline risk is negative. stevie has done a great job. i think it will be the 108 level we took off you from. i think that's where the cross hairs are. at the 200 day. brian gives up a good trade. there's a chance it pushes down to 208. >> it was oversold yesterday. it hasn't been since basically january 2012. when it bounced from oversold it was in the mid-20s. to brian's point it's got a good set up. there are cracks in it. every day it makes the incrementally level low. it's going to 108 or par $100. i would wait until it stabilizes first. >> to 100. >> yeah.
it's a wide ranging bunch and surprising names. guy, kick it off for us. the markets rallied. because people playing on evaluation, it's cheap. anthony mentioned jim timing on the short side. he talked about digital in the spring. stocks have exploded to the upside since. even he gets it wrong timingwise. in 2012 the pc, pressure on hard drive makers. i think the journal had an article a week or so ago. i'm not saying they're doing anything wrong. maybe they're take advantage of the strength. if the take turns over and this is the commodity business that i believe it is. you see how fast stocks go down in the past. i think you're setting up now. >> karen, cat. >> cat is my favorite. a few reasons.
one is the resource mining has been a terrible space. they're exposed to that space. the other thing is management credibility seems to be tarnished. they started the year looking for anywhere between 7-9 in earnings and ended the year looking like they were going to earn about six. it seems interesting to me. i don't know how to put it. how is it that they are unable to see their business? every quarter they seem to be guiding down and yet feel comfortable putting out earnings expectations. something is off at cat. it's not a great year for short. even with the eps numbers coming way down. stocks are down minimally. we're still staying short. we covered mid 70s. >> i still like it on the short side. it's a name i talked about before. i put the average price around 205 on this. we're talking bubbles which we
all seem to be obsessed with. there's a bubble in oil. there's plenty of wti out there. there's a bubble in texas real estate. look at texas. that's all this area here. 180 seems to be short term support if we get through there. it goes much lower. stay short. >> oddly enough, it's ibm. everyone scratches their heads because these are going to ratchet back up. it has closed the gap from earnings. they have less of opportunity to increase going forward. hardware business, no growth there. the businesses that have growth are sluggish. margins are getting squeezed. too much competition. >> i want to talk about the area that's been in the cross hairs of shorts. one company on my you require car is specializing in 3d printing of liver tissue. take a look at the stock. up 300% in the past year. got that big focussing on liver
tissue used in liver testing. just until two days ago it was a billion company a. two days ago it declined 30% in a single day only to be followed by the 17% decline. the short seller on the website seeking alpha which questioned the company's prospect saying it's revenue potential should be expected to add up you to a few million over the next few years. i don't want to spend too much time on this blog post, number of this is back checked. the company says it has been in the cross hairs of bears that have written factual areas. it feels the company can rather than dealing with internet
bloggers. this is an entry full of potential. it's been called above all short opportunity. take a listen. >> the entire industry has basically had you know, five to ten multiple expansion on revenues basis and doesn't generate profit, certainly not free cash flow. 3d systems cut their earnings guidance for the year. this is a bubble that's happened three times in the past. >> there's carnage in the 3d printing space. take a look at the red arrows. the company is called a total expletive joke. we should know that boxle jet had no company when we reached out to the company. in terms in investing this it now. >> look at hewlett packard.
meg has says she's going to be there. they're going to buy a company when it comes time to get exposure. granted the direct plays, strategist up year to date. you get to see huge selloffs, tremendous risks for the retail investors. >> i don't know about fundalmenfundalmen fundamenta fundamentals. >> they shouldn't be engaging with short sellers. think about overstock.com and how it got ridiculously out of hand. it was a distraction for them. it's hard to see if rumors are false to let them go by. >> 3d systems is obviously. it took off from 50 bucks and traded up to 80. 65 give or take is a reduction. you can't play stocks. to steve's point, i don't know what the entry is to get in the business. wouldn't it be easy for hewlett
packard or ibm if they need the space to tuck these guys in? not saying that's going to happen. that's the fear right? if it does happen and you're short on stock, it's going to hurt. trade against the 65 level. >> it's a battle of home improvement retailers. we're talking home depot versus lowes and how you can cash in. and we have one man's battle. stay tuned. o?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what we love? ♪
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welcome back to fast money. call it improvement of two home earning chains. home depot beat the street. which is the better guy? you've been a home depot guy for a long time. >> lowes has been okay. i've said for a while -- i think lowes has been riding on home depot's coattails. a lot of people buy both thinking they're the same company. i think the companies are much
different. home depot is a better company. at current levels rather own home depot. in the quarter, it illustrates. >> tough day for whirlpool. there's a lot of chatter about the client space in the holiday season which also hits home depot and lowes which of course sells appliances. >> they might send it through the ringer. >> you've been waiting all show. wow. the winning trade in the market buying and renting single family homes appears to be winding down. it's a boom many have been capitalizing on. we're following the trend with tom. always good to see you. >> glad to be here. >> what's going on with multifamily? rent still going up? >> rents have held firmly.
they're benefits from strength in the single family housing market as the median prices of housing to own is going up. it makes the rent alternative increasingly interesting to certain people. >> you think there's alternative to multifamily? >> they sold off this summer with the rest of the rate market on the heels. there's real value. i like the multifamily rates. >> do you think there's a shift in the idea of the american dream, everyone wants to own their own home post 2008? >> my sense is that's true. my sense is that the homeowner ship participation levels got way ahead of themselves. that's something politicians wanted starting from the mid-90s. so many homeowners couldn't
afford to be in homes and shouldn't be in homes did lose their homes. there's a cultural shift as well. people don't look at owning a home anymore as an aual price appreciation opportunity year in year out. that sort of dream collapsed in 2007. so i think people are much more comfortable increasingly renting. it's more flexible. they don't have to worry if they find a job in another city about moving. >> wouldn't that underpin the notion of buying up single family homes and renting them out? that's what you're talking about. people don't want to buy and are comfortable doing that. does that mean there's opportunity or likes of black stone and others who have done this large scale, are they seeing what has been a good market maybe not as good anymore? >> at the margin, it's getting difficult for them increasingly to buy at yields which work. all right because as these home values go up. yields go down unless
there's a correlative rent increase. it's getting harder to do that. one of the reasons the public single family rental rates have been under pressure is because market believes there might not be that inorganic growth through new acquisition. >> tom, wie're going to leave i there. time for big movers props and drops. >> we've talked about this for a long time. people confuse the absolute price 1100 level as expense i. evaluation it's not. goldman got in and raise to 1500. i think it goes hire for here. >> drop for staples 1%. >> they meet earning expectations of 42 cents a share. that represents a drop versus last year. they talked or not conference call about struggles they
continue to see in the core office supplies business. this is a businesses facing head winds. although cheap, wouldn't buy it. >> i've been on this for a little bit. bought more on momentum. this is a 24% stake. y'all spoke about the buy back. this is going to make a run at 06 highs, 42.43. i think you'll see prices sooner rather than later. >> deere up. >> it was a good quarter. outlook was good with agriculture being tough. the u.s. krconstruction market showing growth. >> good day here. they have increased orders, better sale, better earnings. it didn't really break out from this 14 to 18 range. i think with this name if you're in it, take profits. wait to see what the stock will do. got to break 18 before i get in.
and a pop year for airplane bathrooms. officials at an airport in india discovered more than a million worth of solid gold bars stashed in the bathroom of a plane that had come from thailand. yand raised the import tax of gold jewelry in an effort to curve demand. >> that's fantastic. look at these. >> you're on a roll tonight. you're hot, hot, hot. >> you go to the plane bathroom for whatever reason. it's air long flight. got to go to the bathroom. >> that's the reason. >> you stash a couple of bars in that louis vuitton bag. you telling the folks on the plane, hey? >> they're stashed. you can't see them. >> let me tell you something, if i can get away with it, i'm taking them home. >> wrap them up you in toilet paper and put them in your
pocket. green mountain getting a boost after hours. some traders in the coffee roaster and another high flier could seen page soon. mike, what did you see? >> it was interesting. today's options activity overall was below average. we saw herbal life trooid. it's risky but a stock a lot of people including myself love to hate. what option traders were doing was going out and buying some of those out of the money put. some of the ones that traded today, examples of howe far and fast they think this could fall. november 50 puts with the most active options in green mountain coffee, over 5,000 trading for 60 cents. i think people are likely to be disappointed based on results of today's earnings. that said, overall the tone for
green mountain coffee remains skeptical. >> you said you had a small position on green mountain. short through equity? >> yes. >> how do you determine what to do? how to use options versus stocks? >> it depends on how they're priced. if the borrow is not expensive, then that's one thing with the borrow expensive. i want to own them there. i don't have a big position. if i did it would be options for sure. i needed to know exactly what i could use. you've been skourg hercouring. >> i think it's really interesting. i'm in this position, so who knows. this is a real guy that doesn't trade in and out of stuff. he in 13d talks about why do you own it? that's item four. he says reporting person views advice and council may address
wide variety of matters including ways to leverage the company's distribution center, recap strategies, potential stock purchase program and potential strategies for confronting the position that and its attendance negative publicity campaign. >> i've never seen that before. everyone knows it's him. no secret. a real guy owns a lot of stock. that's a good reason why the stock was up today. if i was on the short side, i would be afraid. >> there's reports that the singapore sovereign wealth fund will be in on some sort of lbo. >> a lot of people are speculating how is this going to be structured? that was the scuttle today there may be an lbo today. i would not want to be short this stock at all.
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welcome back to fast money. the market flash, auto parts company, jci in the afterhours session. the company announcing a $3 billion share buy back. brings the total to $3.65 billion. they're saying purchases may be made through a variety of methods. increasing dividend to 18 cents per share, increase of 16%. >> thank you very much jackie. >> we talked about the space. it's a great company. had huge tops $40. blew through that. didn't announce this back in october when reported what was a good quarter. even with the run stock it had,
12 1/2-13 times earnings it's not that expensive and lives in the same world as leer and other names we've talked about. it's hard to chase it here at 50. so don't. it should be definitely on your radar screen. >> we would be remissed to talk about bubbles without bringing up bit coin. prices prices up this year. >> bobby lee, ceo of the largest bit coin exchange in that country. great to have you on the show. >> hello melissa. thank you. >> i'm not going to ask you if there's a bit coin bubble. obviously you own exchange that's going to say no what are the fundamental reasons why any asset class should be up in a single year? >> that's a great question.
i think that's exactly what it is. the beginning of bit coin, asset class is the best way to describe it. in terms of value wouldn't worry about how many percent it's been up. it literally started at 0 any number divided by zero is infinite and not a multidigit number. to be a true worldwide asset class, it has to have a large circulation value to account for the global population. if you compare to any asset class probably the most famous is gold with 170,000. that works out to a little under one ounce per person. roughly $1,000 u.s.
compared to that, bit coin is a fraction of what it could become in terms of global asset cost. as we get to the future society if bit coin were to take hold in the society, then the total circulation value would be in the trillions. to get from zero to trillions is a bumpy ride. won't go immediately. >> i want to ask you. bit coin is digital. it's a bar code you get when you put money in. who's to stop anybody else from creating another bit coin? >> that's an excellent question. so indeed it's digital and a system. no one can be stopped from creating another. bit coin is open source. you could download it tonight and call it melissa coin and produce a you new one. the difference is that the install base. net work effect.
how many users will be using it. if cnbc had a coin, you might get the audience to use it. realistically speaking, given popularity of bit coin, it's way in the lead. my brother created light coin derived off bit coin. it's been most popular of coins. it's like open technology. so innovations in other areas where people think they can derive another copy that's better than bit coin, that can be copied back to bit coin. >> we're literally out of time. there's a report there's a bit coin exchange that took off with $4 million. are there guarantees when you invest whatsoever? >> that issue is with the exchange. probably around people who ran away or at least so far.
bit coin exchanges probably needs to be regulated so that doesn't happen again in the future. >> in terms of bit coin, it's about finding a good company exchange they can trust and put your money in and will be there with you for the long term. >> going to leave it there. >> hope to have you back sometime soon. >> if you dropped in your favorite one and i told you about the asset up 4,000% this year. most populated country in the world, commercials regularly on tv advertising this asset class, not regulated. what would you say about this? >> i would not be a buyer at all. first of all the, your question about is there a barrier to entry, do bit coin like that tomorrow. all currency derive value from the government backing which is ultimately backed by the military that puts a gun to your
head and says you can't do that. >> when he said utopian society without getting political, that to me was scary stuff. so to his point, you run from this. miss kitty and papa. >> you tweet it and we trade it. that's next. [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement, we'll help you get there.
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welcome back in case you mised top moments. rapid fire recap on today's executive edge. >> we're exploring the cng front aggressively here. that's exciting given energy reserves in the united states really on tap. lots of potential. we're excited about it. >> i think we'll continue to see strength in trucks. the construction, oil industry growth in the u.s. all helping to replace those older trucks in the marketplace. there's not a lot of new you trucks out which drives demand. i think we'll see strong this year and next and for the
future. >> trucks are small a minority. it's not about the products themselves, the vehicles, it's about the infrastructure. whether hydro general, cng, those infrastructures don't exist today. >> with the boom in shell oil, i think we'll see lower fuel prices for some time to come in this decade. >> buyers are excited. a lot of commotion in the marketplace. tock mark stock markets at an all time high. those contribute to purchase behavior in the segment. >> from the auto industry today, what's the best pick in your view? >> it's all. karen loves -- >> gm. >> they're both. you saw jci news. downstream continue to be the best ones out there.
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sell it. >> governor. >> ceo sounded great with maria. 69.85. >> i would be a seller of gold miners gdx. >> i'm melissa. see you back here my mission is simple, to make you money. i'm here to level the playing field for all investors. thery's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friend, i'm just trying to make you money. my job isn't just to entertain you, but to educate ask teach. call me at 800-743-cnbc. on a day that the market got slammed after the release of nasty fed minutes indicating at